Markup is the amount added to the cost of a product to determine its selling price. It is typically expressed as a percentage of the cost. The formula is: Markup Amount = Cost * (Markup Percentage / 100).

How do you calculate selling price from markup?

To calculate the selling price, you add the markup amount to the original cost. The formula is: Selling Price = Cost + (Cost * Markup Percentage / 100), or more simply, Selling Price = Cost * (1 + Markup Percentage / 100).

Is a 50% markup the same as a 50% margin?

No, they are different. A 50% markup means the profit is 50% of the cost. A 50% margin means the profit is 50% of the selling price. For example, a product costing $100 with a 50% markup sells for $150. The profit margin on this sale is ($50 profit / $150 price) = 33.3%, not 50%.

Markup Calculator | CalculatorHari.com

The Foundation of Smart Pricing: Cost-Plus Strategy

How do you set a price that not only covers your costs but also guarantees a profit on every sale? The most straightforward method is the cost-plus pricing strategy, which starts with your product cost and adds a percentage on top—the markup. This ensures your business model is profitable from the ground up.

This calculator is your essential tool for implementing this strategy. Simply enter your cost and your desired markup, and it will instantly tell you the final **selling price** you need to charge. As a bonus, it also reveals your **gross profit** per item and the resulting **profit margin**, giving you a complete picture of your pricing's effectiveness.

Expand Your Financial Toolkit

Profit Margin Calculator: Analyze your overall profitability based on revenue and costs.
Discount Calculator: Calculate final prices after a discount and see how it impacts your profit.
Break-Even Point Calculator: Determine how many units you need to sell to cover all your expenses.

Frequently Asked Questions (FAQ)

What is markup?

Markup is the difference between a product's selling price and its cost, expressed as a percentage of the cost. For example, if a product costs $10 and you want a 100% markup, you add $10 (100% of the cost) to the cost, making the selling price $20.

How is markup different from profit margin?

They are the two most commonly confused terms in business. Markup is profit relative to cost (Profit / Cost). Margin is profit relative to revenue (Profit / Revenue). Markup is used to decide on a price (input), while margin is used to analyze profitability (output). A 100% markup always results in a 50% profit margin.

What is a typical markup for retail?

Markup varies drastically by industry and product. A common starting point for retail is a 100% markup, often called "keystone pricing," which means doubling the cost to get the selling price. However, competitive items may have a much lower markup (20-30%), while exclusive or luxury items can have a much higher one (200%+).

Markup Calculator

Gross Profit

Profit Margin